If Joe Biden succeeds in passing his massive capital gains tax hike, Americans in 11 states will have to pay more than 50 percent on a share of profits when they sell their assets next year.
The president’s 2025 budget proposal includes raising the top marginal rate on long-term dividends on capital gains to 44.6 percent, which is the highest since the tax was introduced a century ago.
Many economic and tax experts agree that raising capital gains taxes that high would discourage investment and hurt the U.S. economy as the Biden administration tries to keep it on the wealthy.
“The Biden administration may think they are going after the ‘super-rich’ with this proposal, but the opposite will be true,” Dan Savickas, director of policy for the Taxpayers Protection Alliance, told DailyMail.com.
If a 44.6% capital gains tax is included in the 2025 budget, Americans in 11 states will face a burden of more than 50% when state and federal governments combine on asset sales
Biden proposed the highest capital gains tax rate ever at 44.6% in his budget for next year — the last highest was 40% under President Jimmy Carter in the late 1970s
“This new capital gains tax proposal will discourage high-risk, high-reward investments in small businesses and entrepreneurs,” he continued. “It will essentially send money to more established players, hurting smaller players’ access to capital.”
All but seven states have additional taxes on capital gains, and a few would see their overall top rate exceed 50 percent when selling investments and assets.
In California, residents would pay by far the highest top rate, with a combined rate of 57.9 percent.
New York and New Jersey are tied for second place with a combined capital gains tax rate of 55.5 percent.
And Minnesota and Oregon rank third and fourth at 55.45 percent and 54.5 percent overall, respectively, taking into account the state’s and Biden’s proposed national rates.
Maine would see a combined rate of 51.75 percent if Biden’s proposal passes.
The remaining states that would have a high marginal rate for capital gains over 50 percent are Nebraska (50.44 percent), Idaho (50.4 percent), Iowa (50.3 percent), Kansas (50.3 percent) and Georgia (50.09 percent).
Capital gains are profits made from the sale of assets such as stocks, businesses, homes and other investments.
Biden’s proposal to raise the top rate to 44.6 percent is the highest in US history, compared to the current rate of below 25 percent.
The increase would affect people with taxable incomes of more than $1 million and investment income of more than $400,000.
Biden’s 2025 budget proposal includes highest capital gains tax rate ever since the tax was introduced in the 1920s
Previously, President Jimmy Carter’s top marginal rate for capital gains was the highest, when it reached 40 percent in the late 1970s.
If Biden’s tariffs make it into Congress’ final budget for next year, Tal Zackon, co-founder and CEO of TRES Finance, warns it will shift operations out of the U.S.
“As a result, we could potentially see an unintended domino effect where capital is moved abroad and used to invest and grow outside the U.S.,” he said in a statement about the proposed increase in capital gains.
Zackon added: “There will certainly be an aftershock from the implementation of the highest capital gains tax in American history and in the world.”